Transfer pricing rules also apply to financing arrangements between associated enterprises1, this could be where an intra-group loan exceeds the amount a borrower could have borrowed from an independent third party and also where the terms of an intra-group loan differ from those that would have been agreed between independent parties eg a higher interest rate.
The OECD issued their Transfer Pricing Guidance on Financial Transactions in January 2020 which has now been incorporated into the OECD Guidelines 2022, Chapter I, D.1.2.2 and Chapter X, as summarised in B4.150A. HMRC's guidance on financing arrangements is summarised in B4.150.
The transfer pricing rules can only apply if at the time of the making or imposition of the actual provision between the two affected persons:
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